Understanding Entrepreneurship and Running a Small Business Venture

This document provides an understanding of entrepreneurship and running a small business venture. It covers topics such as business plan structure, market research, industry analysis, strategy, and more.

Demonstrate an
understanding of the running
of entrepreneurship and
running a small business
venture

Table of Contents
INTRODUCTION......................................................................................................................4
MAIN BODY.............................................................................................................................4
Business plan structure...............................................................................................................5
The opportunity..........................................................................................................................5
Opportunity.......................................................................................................................5
Market research ................................................................................................................5
The gap..............................................................................................................................6
Industry analysis...............................................................................................................6
Current competitive situation and PEST...........................................................................6
Projected strategic moves by current player.....................................................................7
Changes brought to the competitiveness of the industry by the new venture...................7
Innovations brought to the industry by the new venture...................................................8
Intellectual property/patents..............................................................................................8
Strategy.............................................................................................................................8
Ethics, responsibility, and sustainability ..........................................................................8
The company and team...............................................................................................................8
Legal structure .................................................................................................................9
Ownership ........................................................................................................................9
The advisory board ..........................................................................................................9
The management team......................................................................................................9
Expected contributions by each team ..............................................................................9
Expected salary ................................................................................................................9
Marketing...................................................................................................................................9
Identification of customers.............................................................................................10
Number of potential customers and potential sales revenues.........................................10
Requirements of various customer segments..................................................................10
Importance of purchase convenience, rapid delivery, product customization, etc for these
segments .........................................................................................................................10

Ways to effectively access each segment, distributors, a captive sales force, e-
commerce, etc.................................................................................................................11
Appropriate sales and promotion approaches.................................................................11
Analysis of how purchase decisions are made, and how/if this behaviour can be changed
and Customer price sensitivity .......................................................................................11
Cost of acquiring and retaining customers......................................................................11
Strengths and weaknesses of competitors and ways that competitors are likely to react
when the company enters the market..............................................................................12
Marketing Strategy and Marketing Tools.......................................................................12
Results from Market Research .......................................................................................12
Operating and Financial plans..................................................................................................12
Conversion of inputs into outputs that customer value...................................................12
Supplier relationships......................................................................................................12
Inventory required...........................................................................................................12
Manufacturing/service provision....................................................................................13
Financial plan..................................................................................................................13
Cost calculations ............................................................................................................13
Projected Break-Even Point ...........................................................................................13
Projected Cash flows ......................................................................................................13
Analysis of risk, present value, IRR, etc. .......................................................................13
Contingency plans ..........................................................................................................13
Triggers/thresholds to change courses ...........................................................................13
Conclusions and Balanced Scorecard ......................................................................................14
Balanced Scorecard ........................................................................................................14
Main conclusions from the project.................................................................................14
Limitations and future directions....................................................................................14
REFERENCES.........................................................................................................................15

INTRODUCTION
It is very important for an organisation to develop an effective and efficient business
plan in order to perform organisational functions in correct manner (Aarikka and Jaakkola,
2012). Business plan can be define as a well written document which consists of each and
every detail regarding business. For small size business or an entrepreneur it is essential that
it is developing product and services while consider needs and requirement of customers.
The chosen company for this report is The Comida store which is dealing in retail sector.
This is a small size venture which is providing natural food and drink products to customers
of UK market area. This report includes understanding about the development or running of
business. In this report a proper business plan is developed which consist of market research
as well as different methods of collecting methods. Target market is analysed for offering
products and services as well as enhancing sales of organisation. Apart from this different
opportunity for organisation in market area as well as analysis of competition in order to
perform better. This report will includes detail about the company as well as team member
for development of better business plan.
MAIN BODY
Business plan
Business plan can be describing as a well written document which includes
organisational goals and objective as well as other details about the organisation. This consist
of all the financial details as well as budgets in order to develop product and services. In
order to achieve desired aim respective company needs to develop an effective business plan
(Achtenhagen, Melin and Naldi, 2013). This will help in attracting more customers towards
organisation. this company needs to create a business plan for performing better as well as
improving productivity or profitability. This will include identification of market
requirements as well as conducting a proper market research in order to identify needs and
wants of customers.
Definition of product and service
This company is dealing is retail market sector as well as providing high quality food
products and services. It is very important for an organisation to offer product and services
which will be able to meet with the requirement of customers. this company is providing

100% natural food products and services that is developed by considering the health of
customers. These products will lead to provide better health and standards to the consumers.
Business plan structure
Business plan structure can be defining as a framework for organisation which
includes various important detail about the company. It is a proper plan that will help in
achievement of desired objectives as well as increase the performance of organisation (Austin
and Seitanidi, 2012). This is a small scale store that is developing natural food and drink
products. This business plan will help in enhancing sales of store as well as earning more
profits. Business plan in respect to The Comida store is mention below in details.
The opportunity
Opportunities can be identified by organisation by analysing market as well as
different factors of industry. It is essential for The Comida store to develop better business
strategy which will lead to market the new product and service of them.
Opportunity
There are various marketing opportunities available to The Comida store by offering
its products and services in market area. This company will be able to develop is business
image in market as well as loyal customers (Bocken, Rana and Short, 2015). various
opportunities for respective company will be identified by conducting and effective market
research as well as analysing the gap between organisation and market requirements.
Market research
This can be refers a ways of identifying as well as analysing the data or information
about the market area. It is essential that The Comida store is conducting an effective market
research in order identify as well as analyse the need and requirement of customers. this will
help in developing a products which is as per need and want of potential customers.
Different methods of data collection
Qualitative method – This is one of the method of collecting data which is gather
primarily exploratory research. Qualitative method is helpful in gathering data that will lead
to provide proper understanding as well as detail about the topic (Cinquini, Di and Varaldo,
2013). There are different methods that can be used in order to collect qualitative data such as

observation, focus group, interview and many more. This type of methods are more suitable
when organisation wants in depth detail and information about the topic.
Quantitative method – This type of methods is used to collect and gather data which
can be converted into number and figures. Quantitative data can be easily measured as well as
represented in the form of exact data or numerical numbers. This type of data is more useful
when company wants to collected more structured data and this information can be converted
into usable statistics. There are different ways though which quantitative data can be
collected as well as analysed such as survey, google analytics, questionnaires and many other.
This type of data will help in providing correct as well as accurate detail and information
about the topic.
The gap
Gap analysis refers to a tool or techniques that should be used by The Comida store in
order to determine the gap between the where currently organisation is performing and where
company want to reach (Fedreheim, 2013). This will help in understanding the actual position
of them in order to achieve desired goals. It is essential that The Comida store is analysing
the gap between the product developed as well as need or requirement of customers.
Industry analysis
By analysing the industry respective company will be able to identify the requirement
of industry as well as help in development of products as per requirements. There is different
factor that needs to be consider by The Comida store while developing product and services.
different elements that needs to be consider for analysing the industry are mention below.
Current competitive situation and PEST
It is essential that this company is analysing the current competitive situation as this
will help in developing products that is as per the need and requirements of customers. There
are many companies which is dealing retail sector as well as producing different types of
food and drink products. so by analysing the current competitive situation of The Comida
store this company will be able to perform better.
PEST
There are various factors in external environment of business which will have major
impact on organisation. For this, The Comida store needs to evaluate PEST analysis

(Jaakkola and Hakanen, 2013). This will help in identifying each and every factor in order to
develop better and effective business strategies. Different factors of external environment are
mention below in detail.
Political factor – This factor includes different rules and legislation that is developed
by government of UK. It is very important for this company to follow all policies and
regulations that is developed by political part of UK in order to conduct business
functions in effective and efficient manner
Economical factor – Economical factor includes the growth and development of
country. This factor includes growth rate, GDP, exchange rate and many other factors.
This factor will help in determining the purchasing power of customer as well as
impact over sales and profits of company.
Social factor – This factor includes the customer attitude, behaviour, psychology,
demographic factors and many more. It is very important that The Comida store is
developing products and services as per requirement of customers in order to enhance
the sales of products.
Technological factor – Technological factor includes new and innovative tools and
techniques that is used by company in order to perform better. UK market area has
one of the most advance technology so this will lead to have positive impact over
respective company.
Projected strategic moves by current player
There are many companies which is performance in retail sector and any changes in
the strategy of current player will lead to have major impact over respective organisation as
well as its performance. So it is essential for this company to analyse strategic move of rival
companies.
Changes brought to the competitiveness of the industry by the new venture
The Comida store is bringing various changes in industry as it is providing high
quality products and services in order to satisfy customers requirements (Lenssen and et. al.,
2013). The Comida store is offering 100 % natural food products and drinks in order to
maintain health standards of consumers. This will lead to change the perception of customer

towards food and will be attractive towards food products that will be beneficial for their
health.
Innovations brought to the industry by the new venture
Intellectual property/patents
The Comida store has brought new and innovative products in the industry as this
product will lead to have positive impact over the health of consumers. It is essential for this
company to produce its product and services from other rival companies (Maine, Lubik and
Garnsey, 2012). Intellectual property and patents rights will help respective company to
protect its new and unique products from copying by any other company. This is law that is
help in maintaining the uniqueness as well as innovativeness of products as well as
developing strong brand image.
Strategy
Strategies play a crucial role in achievement of desired goals and objectives. it is
significant for respective company to develop an effective and strong business strategy that
will lead to accomplishment of aims. This company needs to develop different strategies in
order to improve organisation as well as enhance the sales of company. Strategy which is
developed by this company can be consider as a sources of differentiation as well as
competitive advantage (Michelini and Fiorentino, 2012). This company needs to consider
different factors while developing strategies in order to provide new and innovative product
or services. This will help in gaining competitive advantage over other rival companies.
Ethics, responsibility, and sustainability
This company needs to develop products as well as sale it by considering ethics and
morality. It is responsibility of The Comida store to offer those products and services which
does not lead to any harm to customer as well as society. This is crucial for growth and
sustainability of company for longer run.
The company and team
Once this company has analysed the market as well as determined different
opportunities it is important for The Comida store to analyse about organisation as well as its
team. This is a crucial part of business plan as it will help in developing plan as per
requirement of organisation.

Legal structure
This refers to the legal reorganization of organisation. There are different types of
legal structure that will help in providing legal definition to company. The Comida store has
sole proprietorship legal structure (Pätäri and et. al., 2012). This is considered as a simplest
form of business as in this there is one owner who is responsible for different business
activities.
Ownership
The ownership of The Comida store is hold by only one person and that person is
responsible for performing different business activities. Owner of this organisation needs to
take all risk and losses as well as liable to enjoy all profits earned by organisation.
The advisory board
This refers to the body which is providing different strategic advice to the management of
organisation. The advisory board of respective company is informal in nature in order to
achieve desired goals of company.
The management team
It is very important for this organisation to manage its team and employees in effective
manner. By development of effective team this company will be able to perform business
task in better manner.
Expected contributions by each team
This company needs to set standard for each team as well as team members. The contribution
of team member will help in enhancing the productivity as well as profitability of
organisation.
Expected salary
This company is providing salary to its employees as per their job role as well as skills and
qualification.
Marketing
Marketing is considered as one of the crucial part of organisation as it will lead to
attract more and more customers (Pekuri and et. al., 2014). this is one of the most important

part of business plan as it will help in enhancing sales of company as well as achieving more
profits.
Identification of customers
It is important for respective company to identify as well as analyse the customer. this
will help organisation to modify its products and services as per customers requirements. By
identifying the targeted customers The Comida store will be able to satisfy the need and
wants of customers. Targeted customers of this company will be all those customers who will
have potential as well as interest to purchase high quality healthy food products (Pfitzer,
Bockstette and Stamp, 2013). This will help organisation to increase is profits and revenues.
Number of potential customers and potential sales revenues
This company is targeted all those customers of UK market area who are able to
purchase products of respective organisation. It is targeted consumers who are interested in
purchasing healthy food or heath conscious. Potential sales revenues of this company
includes the sales amount which will lead to recover the cost of manufacturing products as
well as earn certain amount of profits.
Requirements of various customer segments
This company is dividing its customers into different segments on the bases of their
need and requirements. The Comida store is major segmenting its customers on the bases of
geographical area and attitude towards healthy or natural products. There are different
customers with different needs and wants (Ritala and et. al., 2013). By dividing customers
into different segments company will be able to fulfil their requirements. There are various
benefits of segmenting customers and it is mention below.
Importance of purchase convenience, rapid delivery, product customization, etc for these
segments
It is very important for this company to convenience its customer while purchasing the
products. this will lead to have impact over its sales as well as help in developing better
relationships. This company is developing healthy food which should be customized as per
the needs and wants of customers. rapid delivery of products will help in satisfying the
customers as well as increasing number of customer base.

Ways to effectively access each segment, distributors, a captive sales force, e-commerce,
etc.
There are different ways though which this company as access its targeted segments. This is a
retail store so it can attract all those customers from the same geographical area. Customers
of this segment can purchase the products directly from the shop. Customer who are
interested in healthy food products can also purchase different types of food products through
E-commerce process.
Appropriate sales and promotion approaches
There are different approaches that could be used by respective company in order to
increase sales as well as promote its products and services. These approaches will help in
attracting larger number of customers towards organisation (Schaltegger, Hansen and
Lüdeke-Freund, 2016). Sales and promotion approach that should be used by company is
traditional as well as modern approaches. this will include newspaper advertisements, digital
media, social networking sites and various other approaches.
Analysis of how purchase decisions are made, and how/if this behaviour can be changed
and Customer price sensitivity
There are many factors on which purchase decisions are made. This will include the
purchasing power, attitude, behaviour, references, social media impact, friends and family
and many more. All of these factors will lead to have influence over the decision taken by
consumers. Behaviour of consumer could be only changes with the change of their
perception. It is very important that products of this company is able to meet with the
customers’ requirements.
Cost of acquiring and retaining customers
It has been analysed that there will be more cost required in order to acquire new
customer as compare to retaining customers. For attracting new customer or acquiring them
organisation have to use different tools and techniques (Sørensen and Jensen, 2015). In order
to retain customers organisation will only require cost to develop as well as maintain
relationship with them.

Strengths and weaknesses of competitors and ways that competitors are likely to react
when the company enters the market
Strengths of competitors is that it is well known organisation which is providing its
products and services for more number of years. Weakness of competitors is that it is not able
to offer new and innovative products in order to meet with the requirement of customers.
Marketing Strategy and Marketing Tools
There are many marketing strategies and tool used by respective company in order to
meet with the requirements of customers. this company have conducted a proper market
research for identifying as well as analysing the needs of customers. this company is using
traditional as well as digital media tool in order to market and promote product and services.
Results from Market Research
From the market research it has been analysed that there are many companies which
are dealing in same market sectors. In order to develop organisation as well as attract larger
number of customers this company have to develop product which is new and innovative. It
is manufacturing food and drink products which is 100 % natural. From market research it
has been analysed that customers are more health conscious nowadays so by developing
products will is provide various health benefits is be helpful.
Operating and Financial plans
Conversion of inputs into outputs that customer value
Supplier relationships
Suppliers play a crucial role in overall business performance as they will help in development
of products as well as selling it to targeted customers. It is essential that this company have
strong relationship with its suppliers in order to puchase high quality food products for
manufactng healthy food and drink products.
Inventory required
This company required to maintaining inventory is order to keep product safe. Respective
company is dealing retial sector as well as providing high quality food and drink products
(Sullivan, Peterson and Krishnan, 2012). By maintaining inventory or stock of its products
this organisation will be able to provide products to customer.

Manufacturing/service provision
It is essential that this company is using new and innovative tools and techniques in order to
develop products. The Comida store have to ensure that it is providing products by
considering all rules and regulations while manufacting products.
Financial plan
Cost calculations
In order to analyse as well as evaluate the profits and loss occurred by organisation this
company have to calculate cost. This will help in manageing the performance of organisation
as well as conducting business functions as per the cost occurred.
Cost calculation:
Total units = 500 (assumption base)
Selling price = 65 pounds per unit
Fixed cost = 550 pounds
Variable expenses = 20 pounds per unit
Total cost:
Fixed cost 550 Pounds
Variable cost (500 x 20) 10000 Pounds
Total 10550 Pounds
Projected Break-Even Point
Break even point is the situation in which company is gainning profits as well as loss
(Wilson and Post,2013). The Comida store is not able to gain any profits or loss at this point
of time. This company have to manage its sales as well as performance in order to enahcne
its sales.
Projected breakeven point – Fixed cost / contribution per unit
= 550 / 45
= 12.22 in terms of units

Contribution per unit = Sales – variable expenses
= 65-20
= 45 per unit
Projected Cash flows
This refers to the cash as well as cash equivalents that is transferred from organisation.
Projection of cash flow will help in estimating the total amount of this that is necessary for
performing all task and activitie sin effective manner.
January February March April
Opening balance - - - -
Cash in
Sales (500 x 65) 32500 32500 32500 32500
Total (A) 32500 32500 32500 32500
Cash out
Material 1500 100 500 600
Marketing 5000 4500 450 5000
Wages 1450 1500 1470 1000
Total (B) 7950 6100 2420 6600
Cash flow (A-B) 24550 26400 30080 25900
Analysis of risk, present value, IRR, etc.
It is essential that this company is analysing its all risk as well as present values in order to
perform busienss operation in better manner. By identifying as well as analysing risk, present
values as well as IRR company will be able to take better business decisions. In the aspect of
above company, this technique is applied for initial investment of 100000 pounds with
discount rate of 10% such manner:
Month
cash
flow
PV
factor Discounted cash flow
1 24550 0.909 22315.95
2 26400 0.806 21278.4
3 30080 0.751 22590.08
4 25900 0.683 17689.7
83874.13
NPV = 100000-83874.13

= 16125 (approx)
Contingency plans
Triggers/thresholds to change courses
 This company is using triple bottom model as this will help in performing better as
well as lead to achivement of desired goals. Respective company will be able to develop
better business decisions. Through this respective company is able to perform better by
analysing all risk.
Conclusions and Balanced Scorecard
Balanced Scorecard
This is considered as an effective tool or technique for managing the overall
performance of organisation. The Comida store needs to use balance scorecard in for
improving the business as well as its operation.
Main conclusions from the project
From this report it can be concluded that company needs to develop an effective
business plan. This will help in achieving desired goals and objectives. There are various
elements that needs to be consider by development of business plan. Company will have to
analyse the market as well as targeted customers for attracting more and more customers.
Limitations and future directions
There are some limitation faced by company and it is essential that this company is
managing its limitation in order to perform better as well as achieve goals. It limitation
includes lack on skilled employees, financial insatiability and so on. This is a small scale
company so it have to manage limitation in order to achieve goals.

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